MKTG 300 3 16 15 Consumer Behavior Consumer decision making process 1 Problem recognition at some point you recognize a gap between your existing state and your ideal state From a marketing angle there needs to be a strategy every step of the way Get consumers to dwell on that gap What is a marketer doing to assist in recognizing that solution EX Geico savings Allstate mayhem 2 Search shopping behavior Looking for things acquiring information about things What do you know about how your market searches for things Search assistance what type of information are you giving your consumers What is your strategy for assisting consumers when they are searching for solutions 3 Alternative evaluation How do consumers evaluate alternatives What are the alternatives they look at when they are trying to solve a problem 4 Purchase Acquiring a solution whether bought or obtained by other means rent borrowed made gifted bartered etc 5 Use and evaluation Using and evaluating a solution recommending the product to others criticizing it and possibly repurchasing it After sale relationship Cognitive Dissonance a state of post purchase tension buyers remorse Complaints not repurchasing returns etc Marketers should detect and deal with cognitive dissonance The buying process is fueled by tension A follow up strategy should prevent post purchase tension or relieve what is there People are seeking to reinforce their purchase Negative word of mouth travels faster than positive word of mouth Major theories of consumer behavior 1 Economic Man Theory Would you describe yourself as a rational consumer This theory is based on rational decision making Prior to 1970 there was no study of consumer behavior 1 Objective criteria when we are going through the decision making process we use MEASURABLE criteria Ex MPG Trade in value etc in a car By contrast how important is color subjective criteria 2 Utility maximizers the greatest amount of benefit for the lowest amount of costs 3 Perfect information How do you gather perfect information about an insurance company A lot of people short cut because they can t get perfect information There are too many choices and people are overwhelmed People are less than rational This is an inherent weakness in how we analyze consumer behavior 2 Involvement Theory not trying to analyze behavior in terms of rationality As we go through this process are we going to be active decision vs passive decision makers What is your activity level There are three decision making types How much product and brand information do consumers have 1 Routine decision makers low involvement Consumers have all information 2 Limited problem solving consumers have su cient product information but lack brand information Why is one brand better than another 3 Extensive problem solving High involvement Consumers lack both product and brand information and much research to make a decision 4 Low involvement consumers don t think very hard about making rational decisions routine view things di erently The lower the level of involvement the more there is an emphasis on advertising rather than personal selling Advertising at low levels focuses on broadcast rather than print How intensively do you want to distribute the product Intensive vs selective distribution The lower the level of involvement the more intensive the distribution will be 3 Social Theory How much of your buying behavior is influenced by social factors 1 Macro level social influence HUGE They exist in the abstract They are larger than life 1 Culture Consumers exist within a culture National character ex American or Japanese consumers Does it make a di erence what culture this person is in 2 There are also many sub cultures ethnicity age geographic etc You Are Where You Live YAWYL 3 Social class income what type of work you do level of education etc Lloyd Warner Theory occupational type source of income house type and neighborhood dwelling area How does this influence behavior Communication lifestyles customs values media habits product priorities etc 2 Micro level social influences interpersonal by nature 1 Reference groups smaller interpersonal groups that serve as a frame of reference for your consumer behavior Clubs teams etc To what extent is your own consumer behavior being influenced by these small reference groups Types of influence informational influence normative influence peer pressure identification influence ex preference of automobile brand I m a Ford man 2 Opinion Leaders Mr Know It All the go to person about a product or service Experts Also group leaders and popular charismatic people 1 2 step flow of communication The marketer targets opinion leaders Reaches important social influences who will advertise for them and influence everybody else Opinion leaders will then reach society and advertise for the marketer by word of mouth This is how you make word of mouth happen 3 Role models Celebrity status opinion leaders movie stars sports heroes etc Ex celebrity endorsements and spokes people Celebrities have Q scores for their attractiveness in advertising 4 Family Household family lifecycle types of roles performed within the family buyers users initiators